The federal government has asked Statistics Canada to find a way to more accurately monitor foreign ownership in the real estate sector.
The federal budget released Tuesday allocated $500,000 over the next year for the agency to develop methods for gathering data on purchases of Canadian housing by foreign homebuyers.
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The agency was asked to collaborate with British Columbia, which is also seeking more data on the role of foreign buyers in its housing markets.
Finance Minister Bill Morneau pointed to the lack of reliable data on foreign ownership in housing at a time when anecdotal evidence is pointing to high numbers of foreign buyers.
"Too often, when we ask for the evidence needed to make informed decisions, we find it just doesn't exist," he said during his budget speech.
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"For example, we know that many Canadians, particularly British Columbians, are concerned about the effect of foreign ownership in the housing market. Unfortunately, the problem isn't fully understood."
Morneau said there was a need for more information and said the money allocated in the budget would support Statistics Canada in its efforts to improve the data available.
British Columbia recently announced its intention to have homebuyers disclose whether they are citizens or permanent residents of Canada or another country.
The province also is paying for a study geared to measuring the extent of foreign home ownership and any potential price impact. Vancouver's housing prices rose more than 20 per cent in the year ending in February.
CMHC also looking at foreign ownership
Canada Mortgage and Housing Corp. is also looking into the issue of foreign ownership, but has run into difficulty determining which homeowners are actually foreign, as building owners are often not helpful in providing the information. CMHC is now consulting with police agencies and tax authorities around the world.
Morneau called housing "the greatest investment of many middle class Canadian families" and said the focus on foreign buyers reflects concern about how the middle class is being hurt by hot housing markets in southern Ontario and the Vancouver area.
In February, the minimum down payment for the portion of an property price above $500,000 was doubled to 10 per cent for people to qualify for government- insured mortgages from CMHC.
CMHC has also announced an increase to guarantee fees for its securitization programs, effective July 1, 2016. Both measures were put forward by the Liberal government in an effort to cool housing markets. The previous Conservative government had also tightened mortgage rules in a bid to prevent the housing market from becoming overheated.
A better housing index
The budget also provides Statistics Canada with $13.5 million over five years to improve the quality and timeliness of economic and financial data.
James Tebrake, director general of the Macroeconomic Accounts Branch at Statistics Canada said one of the things the agency intends to develop with this money is a new housing price index. Its current index only looks at new single family housing – the new one will include resale housing and add condos and other housing types for a more complete look at housing inflation.
There are other statistical products the agency plans to create, among them:
- A new set of tables that show the level of portfolio investment Canadians hold abroad by country and by instrument.
- A set of additional tables that will provide information on the securities holdings or issues from Canadian companies by sector, country, currency and maturity.
- A new set of financial account tables that gives greater details about the types of assets and liabilities held by the household sector.